Mental Healthcare Spending Soars Among Americans With Private Insurance

Although the use of telehealth has plateaued, spending on mental health services by Americans with private health insurance increased by 53% from March 2020—the onset of the COVID-19 pandemic—to August 2022 and use of mental health services increased by 39% over the same period, according to data released on Friday by RAND Corporation and Castlight Health.

Findings from the study were published in JAMA Health Forum.

“If greater utilization of health services drives higher healthcare spending, insurers may begin pushing back on the new status quo,” Jonathan Cantor, lead author of the study and a policy researcher at RAND, said in a news release. “Insurers may look for ways to curb costs and that could mean less flexibility about using telehealth for mental health services.”

For their study, researchers from RAND reviewed claims from about 7 million commercially insured adults from January 2019 through August 2022. Claims information was provided by Castlight Health, a health benefit manager for employer-sponsored health insurance plans for about 200 employers in all 50 states.

From March 2020 to December 2020, in-person mental health services declined by 40%, but a concurrent 10-fold increase in the use of telehealth-based services drove up overall use of mental health services by 22%. Telehealth use then stabilized from December 2020 through August 2022, while use of in-person services increased by 2.2% per month, reaching 80% of their pre-pandemic levels by August 2022. Thanks largely to the early-pandemic spike in telehealth usage, overall engagement with mental healthcare services by August 2022 was 39% higher than pre-pandemic levels, and the increase was generally consistent across various mental health conditions tracked.

During the post-acute pandemic period (December 2020 to August 2022), meanwhile, the average spending rate on mental healthcare services was more than $3.5 million per 10,000 beneficiaries per month, compared to $2.3 million per month pre-pandemic. Cantor said it is unclear whether the increased use of mental healthcare services will continue or return to pre-pandemic levels.

Reference

Spending on mental health services has risen by more than half since beginning of pandemic, study finds. News release. RAND Corporation. August 25, 2023. Accessed August 25, 2023.